Netflix boss Reed Hastings snapped up $20 million in shares of the streaming giant after its stock plummeted 30%
- Netflix co-chief Reed Hastings bought shares worth $20 million in the company after its stock tumbled 30%.
- He bought 50,000 shares at an average price of $388 per share on January 27 and 28.
- Netflix stock is down 45% from a high of nearly $700 just two months ago.
Reed Hastings, Netflix's co-chief executive officer, snapped up shares worth $20 million in the video-streaming company days after its stock tumbled 30%, according to a Securities and Exchange Commission filing.
He purchased over 50,000 shares on Thursday and Friday at an average price of $388 per share, the filing showed. The transactions, made on behalf of a Hastings family trust, raised the amount of his beneficially-owned shares by 1% to 5.16 million.
On January 20, Netflix posted fourth-quarter earnings that beat analyst expectations on user numbers and revenue. Despite that, its shares tumbled 32% to their lowest since April 2020 on projections of weak subscriber growth. The company's shares had a volatile week, also driven by broad vulnerability to US rate hike expectations.
On January 27, Netflix shares rose 10% after billionaire Bill Ackman revealed a $1.1 billion bet on the streaming service. Ackman said the "attractive" purchase made his hedge fund Pershing Square a top-20 shareholder in the firm.
But Netflix has not yet recovered, and the stock is down 45% from a high of nearly $700 just eight weeks ago. It was last trading 2.6% higher in Monday's pre-market session at $394.48 per share.
Some analysts say Netflix's pandemic-fueled boom is over. In its fourth-quarter update, the company predicted only 2.5 million new subscribers, or 8% year-on-growth, in the first quarter of 2022.
"While that may sound a lot, Netflix was onboarding new customers regularly at a year-on-year growth rate of 25%+ earlier in the pandemic," Adam Vettese, an analyst at investment network eToro, said.
Vettese pointed to two reasons why Netflix has experienced such a dramatic slowdown.
"Firstly, during lockdown, Netflix had a captive audience, but now restrictions are much less severe in most countries, the streaming firm is once again competing for viewers' time," he said.
"And while Netflix is still the undisputed king of the streaming world, it is up against some serious players with deep pockets such as Apple, Amazon and Disney. In order to stay on top, it will need to spend big and keep producing the hits such as Squid Game and Don't Look Up."